Update: San Diego unemployment rises to 10.5 percent

Written by Elizabeth Aguilera

9:49 a.m., Aug. 19, 2011

Sara Hahne, manager of the new Encinitas Kohl's, tracks applicants during the interview process. More than 500 people came to the La Costa Resort and Spa on Monday to interview for one of 150 jobs. The new store is slated to open Sept. 28. — John R. McCutchen

Unemployment in San Diego County ticked up in July to 10.5 percent, up from a revised 10.4 percent in June, reaching a high not seen for nearly a year, according to data released Friday by the state Employment Development Department.

“Initially people might be discouraged that the unemployment rate was up,” said Alan Gin, economist at the University of San Diego. “But typically the unemployment rate rises in July, and the one-tenth of a percent increase is lower than it has been in past Julys.”

Mid-summer unemployment figures usually spike because of the influx of students into the workforce, summer employment and education-related transitions, experts said.

The county lost 6,500 jobs overall between June and July. In the past year the county added 20,100 jobs.

San Diego is faring slightly better than the state.

California’s seasonally adjusted unemployment rate rose in July to 12 percent, up from 11.8 percent in June. The state added 4,500 jobs in July after adding 28,800 jobs in June. The state now ranks second in joblessness, just below Nevada where unemployment is 12.9 percent. The unadjusted unemployment rate was 12.4 percent, up from 12.1 percent in June.

“This is the pattern we’re likely to see through 2011,” said Michael Bernick, former EDD Director and a fellow at the Milkin Institute. “There is no short-term fix.”

Nationally, the unemployment rate in July was 9.1 percent, down slightly from 9.2 percent in June.

Unemployment and job figures are the results of two separate surveys. Employers report the number of people they employ while the unemployment number is taken from household surveys. The unemployment rate includes people eligible to work who are actively looking for work. It does not include people who have given up looking for a job.

The majority of San Diego County jobs lost in July were seen in the government sector, down 11,200 jobs, particularly in local education, which lost 9,100 jobs, the EDD found.

The decrease was offset by industries that added paid positions in July including professional and business services and leisure and hospitality. Construction, finance and real estate also saw minor increases, a positive sign in areas that have suffered crushing losses due to the recession.

Despite the dismal tone of the report, economists say the employment picture is not as bad as it seems.

“It was a surprisingly good report and it does not suggest that San Diego is on the brink of falling back into recession,” Reaser said. “If you adjust for the normal seasonal influences you saw quite a positive impact on the economy.”

Reaser and Gin both seasonally adjusted the figures, to minimize cyclical factors, and found improvement.

Reaser’s seasonally adjusted figures show a gain of 5,400 jobs in July and 10.2 percent unemployment rate, a one-tenth of a percent dip from the month prior.

So far this year 16,800 jobs have been created in San Diego County. Local experts forecast job creation for the year would be around 18,000. At this pace job creation in 2011 could double last year’s 10,000 new jobs, Reaser said.

“We are still digging our way out of a very deep hole but we are coming out of it,” Reaser said. “In a couple of years it looks like we will have regained about half of the job losses.”

Gin’s seasonally adjusted figures show a gain of up to 9,000 jobs between June and July and he found unemployment fell to 9.8 percent in July from 9.9 percent in June.

“What this shows is that although we are not out of the woods, we are not likely to head into a double dip,” Gin said.

Adecco, a staffing provider, is having its best year since 2008. Employers are keeping temporary workers longer and some are increasing direct hiring, said Christa Shapiro, regional vice president for the firm.

“We are seeing a big trend in sales and marketing positions, which is a great indicator that businesses are wanting to get out there,” Shapiro said. “It tells us that people are feeling the economy is turning.”

Source: SignOnSanDiego

 

Mortgage rates sink to low not seen since '50s

Average rate on 30-year-fixed loan is 4.15 percent, but many can't take advantage 

AP Associated Press

updated 8/18/2011 12:52:01 PM ET

WASHINGTON — The average rate on a 30-year fixed mortgage has fallen to its lowest level on records dating to 1971.

The rate on the most popular mortgage dipped to 4.15 percent from 4.32 percent a week ago, Freddie Mac said Thursday. Its previous low of 4.17 percent was reached in November.

The last time long-term rates were lower was in the 1950s, when 30-year loans weren't widely available. Most long-term home loans lasted 20 or 25 years.

Few expect record-low rates to energize the depressed home market. Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. Yet prices and sales remain unhealthy and are holding back the overall economy.

Five years ago, the average 30-year fixed rate was near 6.5 percent. In 2000, it exceeded 8 percent.

Most homeowners are paying rates more than a full percentage point higher than the current average. The average rate on all outstanding mortgages is 5.3 percent, Freddie Mac said, citing data from the Bureau of Economic Analysis.

After previous recessions, housing accounted for 15 percent to 20 percent of overall economic growth. This time, in 2009 and 2010, housing contributed just 4 percent to the economy.

"The housing market is not going to turn around because of this, because it isn't the mortgage rate that matters," said Joel Naroff, head of Naroff Economic Advisors. Naroff blamed the "horrendous" process of qualifying for a mortgage despite tougher lending standards. He said trying to sell a home in many markets is just as difficult.

Many would-be buyers can't take advantage of the low rates. The unemployment rate is 9.1 percent, few Americans are getting raises and many are struggling to shrink their debt loads.

Banks are also insisting on higher credit scores and larger down payments for first-time buyers. Many repeat buyers have too little equity invested in their homes to qualify for loans. Others are too nervous about the economy or their job security to invest in a home.

The average rate on a 15-year fixed mortgage, which is popular for refinancing, fell to 3.36 percent, also a record low. It's the third straight week of record lows for the popular refinancing option. Freddie Mac's records date to 1991, but analysts believe the new low on the 15-year mortgage is the lowest ever.

Borrowers who qualify have rushed to refinance and take advantage of the low rates. Refinancing accounted for 70 percent of mortgage applications in the first half of the year, Freddie Mac said. Refinancings tend to provide less benefit to the economy than home purchases do.

Mortgage rates typically track the yield on the 10-year Treasury note. Economic fears have drawn investors to the safety of Treasurys, driving down the yield on the 10-year note to barely above 2 percent. That helped lower mortgage rates.

The Federal Reserve offered a dim outlook of the economy last week, saying it expects growth will stay weak for two more years. As a result, the Fed said it expects to keep short-term rates near zero through mid-2013.

Roughly 14 million Americans remain unemployed. And the economy isn't creating enough jobs to rapidly trim that figure. The economy grew at an annual rate of just 0.8 percent in the first six months of this year, the slowest such pace since the recession officially ended more than two years ago. In June, consumers cut spending for the first time in 20 months.

Fewer Americans bought previously occupied homes in July for the third time in four months, the National Association of Realtors said Thursday in a separate report. It said sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes. That's far below the 6 million that economists say must be sold to sustain a healthy housing market.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rate on a five-year adjustable-rate mortgage fell to 3.08 percent, its lowest level on records dating to January 2005. Last week's reading of 3.13 percent also was a record low. The week before was, too.

The average for one-year adjustable-rate loans fell to 2.86 percent, the lowest on records going back to 1984. Last week's average of 2.89 also set a record.

The rates do not include extra fees known as points. One point is equal to 1 percent of the total loan amount.

Source: MSNBC.com

Apartment outlook positive

Story by Roger Showley

Saturday, August 13, 2011

San Diego is among western markets likely to perform best in the rental market, John Burns Real Estate Consulting says.
In a bulletin posted on the firm's website, Vice President Peter Dennehy said the "high barriers" to home buying here and in Seattle, San Jose, San Francisco and Orange County make them "among the nation's top-performing rental markets in coming years."
"Development money is flowing into apartments and construction activity is already picking up," he said. "Our apartment feasibility business is growing rapidly and the number of projects we are finding that are on the drawing boards, or with land in escrow at very high prices, is staggering."
He cited figures that building permits for multifamily housing units are up nearly 70 percent in major western markets.
The Construction Industry Research Board reported San Diego County's increase twice that rate. The January-June total for multifamily units authorized was 764 in the first half of 2010 and 1,643 for the same period this year -- a 150.1 percent rise.
Dennehy said builders are offering a wide variety of rental types, from townhouses and high-rises to "busted condos" being converted to rental status after developers failed to sell them to individual buyers. Some of these condos were built as apartments, converted to condo status and have been converted back to rentals.
He cited as one example the 680-unit Vantage Pointe tower in downtown San Diego that failed as for-sale condo project and is now nearly 80 percent rented out in less than one year.
"The apartment market clearly presents great opportunity in coming years," Dennehy said.
But he said investors and builders will have to balance broad analysis with detailed, location-based studies. They also will have to understand renter options to buy and what the future supply of all housing will look like.

Source: SignOnSanDiego

Fed Plans to Keep Rates Low 'At Least Through Mid-2013'

Published: Tuesday, 9 Aug 2011 | 4:05 PM ET 

By: CNBC.com with AP and Reuters

 

Joshua Roberts | Bloomberg | Getty Images

Fed Chairman Ben Bernanke

 

The Federal Reserve, acknowledging that the economy is much weaker than expected, hoped to reassure nervous markets Tuesday by saying it would keep interest rates exceptionally low "at least through mid-2013."

Stocks initially plunged following the Fed statement but then gyrated as investors tried to assess what such a long extension of low interest rates would mean. The market finally staged an explosive rally in the final hour as the Dow closed up Over 400 points.

Treasury bond prices also were volatile but finally ended higher. Gold soared further while the US dollar skidded.

The Fed previously had said that it would keep rates low for "an extended period." The more explicit time frame is aimed at calming investors by giving them a clearer picture of how long they will be able to obtain ultra-cheap credit. Rates have been near zero since December 2008.

Fed policymakers used significantly more downbeat language to describe current economic conditions. They said so far this year the economy has grown "considerably slower" than the Fed had expected.

They also said that temporary factors, such as high energy prices and the Japan crisis, only accounted for "some of the recent weakness" in economic activity.

Three officials, Richard Fisher of the Dallas Fed, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia, voted against the move.

"The committee currently anticipates that economic conditions—including low rates of resource utilization and a subdued outlook for inflation over the medium run—are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013," the U.S. central bank said in a statement. 

Fed officials met against a backdrop of speculation that they would say or do something new to address a darkening economic picture.

The stock market has plunged and government data have signaled a weaker economy in the four weeks since Chairman Ben Bernanke told Congress that the Fed was ready to act if conditions worsened.

The economy grew at an annual rate of just 0.8 percent in the first six months of the year. Consumers have cut spending for the first time in 20 months.  Wages are barely rising. Manufacturing is growing only slightly. And service companies are expanding at the slowest pace in 17 months.

Employers hired more in July than during the previous two months. But the number of jobs added was far fewer than needed to significantly dent the unemployment rate, now at 9.1 percent. The rate has exceeded 9 percent in all but two months since the recession officially ended in June 2009.

Fear that another recession is unavoidable, along with worries that Europe may be unable to contain its debt crisis, has rattled stock markets.

The Dow Jones industrial average has lost nearly 15 percent of its value since July 21. On Monday, it fell 634 points—its worst day since 2008 and sixth-worst drop in history.

The tailspin on Wall Street was further fueled by Standard & Poor's decision to downgrade long-term U.S. debt.

Bernanke didn't speak publicly after Tuesday's Fed meeting.

The chairman this year made a historic change by scheduling news conferences after four of the Fed's eight policy meetings each year, but Tuesday's wasn't one of them.

Later this month at the Fed's annual retreat in Jackson Hole, Wyo., Bernanke will likely address the weakening economy, the S&P downgrade and the market turmoil.

Earlier this summer, the Fed ended a $600 billion Treasury bond-buying program. The bond purchases were intended to keep rates low to encourage spending and borrowing and lift stock prices.

 

Source: CNBC.com

Uncertainty over debt deal details does little to help local economic recovery

Story by Elizabeth Aguilera

Tuesday, August 2, 2011

The impreciseness of the deal and the uncertainty about where budget cuts will come from does little to help the fragile economic recovery in San Diego and could potentially have a huge impact on the region’s job growth in the coming years, experts said.
The deal imposed $1 trillion in budget reductions over the next decade but did not outline where cuts would be made, virtually ensuring continued hesitance among consumers and businesses that will keep them from spending. That doubt is expected to guarantee the unemployment rate in the county will remain about 10 percent through the rest of the year with very little job growth, experts said.
“It doesn’t seem like it really solved any problems. It just postponed it,” said Kelly Cunningham, economist and senior fellow at the National University System Institute for Policy. “I don’t see a big rebound or a sudden shift. The economy will continue to be pretty stagnant. The uncertainty of it is weighing on us.”
And that uncertainty is linked to what the 12-member committee, which is tasked with identifying trims by Nov. 23, will decide, even though those cuts won’t begin until 2013.
Consumer confidence and employment, already depressed, are expected to continue to drag. In June, the local Leading Economic Indicator Index fell 0.2 percent, driven by a 1.06 percent drop in consumer confidence, according to the report by the University of San Diego Burnham-Moores Center for Real Estate.
Employers are also expected to be skittish about spending, hiring and expansion because of the potential for increased taxes as the committee seeks additional revenue, experts said.
San Diego County, where the five largest employers are public entities, was already bracing for cuts to state, local and education jobs because of the state’s financial problems.
Now, federal payrolls seem to be at stake although experts are not in agreement over the impact of the potential job cuts or how quickly such a reduction would be seen. The federal government employed more than 45,000 people in the county, not counting active duty military, in June, says the California Employment Development Department.
Federal expenditures in San Diego County are in excess of $36 billion, and about 45 percent goes toward defense, Cunningham said. Inevitably cuts to the government’s budget will most likely include defense and contractor cuts, he said. According to Defense News’ rankings of the top 100 defense firms in the world, eight of the top 11 companies have a presence in San Diego, including Northrop Grumman, General Dynamics and General Atomics.
Point Loma Nazarene University economist Lynn Reaser does not expect deep cuts in San Diego County because of recent shifts in military resources to the West Coast.
Experts do agree that if the November deadline for identifying cuts is not met, automatic reductions will trigger cuts evenly between defense and nondefense outlays, which will have a significant impact on the military budget.
During the recession, it was these very defense and government jobs that helped keep San Diego’s economy afloat as private sector jobs were in free fall. In 2009, the defense industry is credited for creating nearly 27,000 jobs and pumping billions of dollars into the local economy, according to an analysis by the University of California San Diego. Another report by the San Diego Military Advisory Council pegged defense-related employment that year at nearly 355,000.
In addition to losses in military and government contracting, cuts in public construction are expected.
The ailing construction industry took the biggest hits during the height of the recession. In San Diego, 44 percent of construction jobs have disappeared since the peak in 2006.
Now, the industry anticipates losing some of the few jobs left because of the public projects that are expected to be shelved, said Ken Simonson, chief economist for The Associated General Contractors of America.
“Future projects will be smaller and less frequent,” he said.
As specific sectors brace for future cuts, experts also believe the committee will address entitlement programs, including Social Security, Medicare and Medicaid, but are concerned about how those cuts would be implemented and how costs would be passed on to consumers. If people who rely on public programs are diverting funds to health care, for example, they will have less to spend on other necessities.
In San Diego County 388,325 people, or 12.5 percent of the population, receive Medicare. Nationally, 14.8 percent of Americans are on Medicare. Social Security retirement, survivor or disability payments are sent to 415,805 people, about 14 percent of the county’s population. Nationally, 19 percent of the population receives Social Security benefits.
Other potential items that experts say may be considered include increased taxes, elimination of the mortgage interest deduction and other discretionary spending. In San Diego, for example, discretionary funding is money that supports scientific, high-tech, biotech and other types of research, Cunningham said.
The list of cuts will land in the middle of the critical holiday shopping period, which accounts for one-third of annual retail sales.
“We are in a recovery mode since the summer of 2009 that has been marked by three steps forward, two steps back,” said John Challenger, of Challenger, Gray & Christmas, a global outplacement firm in Chicago. “We may be in a two-steps-back retrenchment.”
Despite the shadow the debt deal casts on the economy, economists point to a silver lining that includes decreased oil prices due to a slowing global economy and standing lower interest rates.
“Confidence and jobs will still be the critical factor affecting consumers,” Reaser said.

Source: SignOnSanDiego

The Debt Deal Viewed Through Real Estate’s Prism

By Erika Morphy

August 3, 2011

 

Capitol Hill

 

WASHINGTON, DC-So it happened. Within hours of an apparent default, Congress came together and delivered a bill that would raise the debt ceiling and work towards reducing spending.

The impact to commercial real estate is still a work in progress: more cuts to government spending will be identified under the deal, as will additional sources of revenue. So yes, carried interest is most likely back, yet again, on the table. Still, with the deal closed, the industry has been able to come to a few conclusions about the next two years will bring. Some thoughts as expressed to GlobeSt.com.

We always knew there would be a debt deal...

"I don’t think a default was ever viewed as credible," Kevin Finkel, executive vice president, director of acquisitions at Resource Real Estate, a New York-based real estate asset manager, tells GlobeSt.com. "That is why the markets never fluctuated that dramatically even when talks seemed to break down."

…But we didn’t know how brutal it would be.

That said, the way the political drama played out with the extreme brinkmanship, took a lot of people by surprise. "Especially with the new crop of Congress people from the Tea Party that didn’t want to compromise,” Finkel says. “To me as a businessperson, that was scary and I think it scares investors too."

Does this mean that every issue that comes up in Congress will result in a bloodletting sprawl, Finkel wonders. "I am afraid so and that is no way to run a country," he remarks.

The US will still be a safe haven for investors…

There are 17 countries in the world that sport the AAA rating, Eric Michael Anton, executive managing director and principal of Eastern Consolidated in New York, points out, a list that includes such tiny locales as Isle of Man. “Foreign capital is still coming here,” he tells GlobeSt.com. Even in the run up to the midnight hour agreement, so to speak, the bond returns showed that investors continued to seek out US debt, he says.

…But the bifurcation of trophy and second-tier markets will step up.

Lately there have been signs that investors are interested in Middle America again--particularly multifamily investors that are finding prices too rich on either coast. Foreign investors, albeit more slowly, have been following suit. However, if the US does suffer a credit downgrade the distinction between the gateway global cities and the rest of the country will surely sharpen, Anton also says. “Top cities such as New York, Washington, San Francisco, Boston and Los Angeles will continue to pull in tremendous debt and equity.” Foreign capital, however, stayed away from the Rust Belt, and other secondary cities, and if the US does get downgraded, this will be an additional reason for them to stay away, he said.

We got a commitment to slow spending…

This had to be done, Finkel says. "The country had to deleverage and perhaps just as importantly, it had to tell the world that our debt would not grow anymore."

…But at what cost?

The price of this deal was substantial cuts in government spending, Dennis Russo, co-chair of the commercial real estate department at Manhattan-based law firm Herrick, Feinstein LLP, tells GlobeSt.com. That will lead to slower growth, given the sluggishness of the private sector.

“Economic sluggishness plus austerity tends to equal a less-than-fertile environment for vitality and growth in commercial real estate," says Russo. “The health of most sectors of the commercial real estate economy--office leasing, for example, and sales-investment--depends on growth and the vitality of the gross domestic product, and for the time being, I just don’t see where that growth will be coming from.”

The impact of Washington’s austerity is already being felt outside of the debt ceiling negotiations. The Centers for Medicare and Medicaid Services just announced an 11.1% cut in Medicare rates set, according to the Wall Street Journal - an announcement that promptly sent health care REIT prices tumbling. 

Property valuations could be affected in the near term as well, Michael A. Torres, CEO of Adelante Capital Management LLC, a REIT investment manager in Oakland, CA, tells GlobeSt.com. The rest of the cuts and their subsequent effects will remain in doubt until the “Super” Congress decides on cuts, or they don’t.
 
Source: GlobeSt.com

June foreclosure numbers for San Diego

Lily Leung

July 19, 2011

June 24, 2011 | The Associated Press

The number of San Diegans filing for foreclosure and defaulting on their mortgages continued to fall in June, reported real estate tracker DataQuick on Tuesday.

The county recorded 1,353 notices of default in June, the same amount as May but down 21.8 percent from a year ago. A notice of default is the first step in the foreclosure process. June's drop marks the 19th consecutive year-over-year decrease for San Diego.

Foreclosures, numbering 949 in June, are down 12.3 percent from a year ago -- marking the 13th consecutive year-over-decrease. They were up 9.3 percent from May.

June numbers for San Diego align with the state's. Foreclosures in California fell to a four-year low during the second quarter, from March to June, the monthly DataQuick report said.

"A lot of theories are being floated as to why the numbers are down," said DataQuick President John Walsh, in a statement. "Bank policy changes. Legal challenges. Politics. Holding back temporarily so as not to flood the market."

Walsh added: "The fact of the matter is that no one really knows, outside of lending and servicing industry insiders. One thing is certain: Homeowner distress spreads fastest when home price declines are steepest. And it now appears likely that, barring some new economic shock, the worst of the price declines are behind us,"

Comparing 2011's second quarter to last year's second quarter, both notices of default and foreclosures are down. That's a trend seen throughout Southern California, including Los Angeles, Orange, Riverside, San Bernardino, Ventura and Imperial counties.

Southern California recorded 30,384 notices of defaults this second quarter, down 19.5 percent from 2010's second quarter. There were 21,247 foreclosures in the region this quarter, down 13.9 percent from last year's second quarter. 

Notice of default, Q2

County	Q2 2010	Q2 2011	Yr/Yr pct chg
Los Angeles	13,045	11,250	-13.80%
Orange	4,313	3,705	-14.10%
San Diego	5,458	4,158	-23.80%
Riverside	7,266	5,534	-23.80%
San Bernardino	5,945	4,334	-27.10%
Ventura	1,346	1,133	-15.80%
Imperial	375	270	-28.00%
Southern California	37,748	30,384	-19.50%

Source: DataQuick

Foreclosures, Q2

County	Q2 2010	Q2 2011	Yr./Yr. Pct Chg
Los Angeles	7,300	6,733	-7.8%
Orange	2,223	1,887	-15.1%
San Diego	3,315	2,763	-16.7%
Riverside	6,086	4,810	-21.0%
San Bernardino	4,698	4,083	-13.1%
Ventura	745	697	-6.4%
Imperial	319	274	-14.1%
Southern California	24,686	21,247	-13.9%

Source: DataQuick

Source: SignOnSanDiego

How do local rents compare to other areas?

Lily Leung

Aug. 2, 2011

Rents have risen in San Diego County, affecting affordability among certain occupations, says on Washington, D.C. based policy group. Pictured is Carmelina Castillo and her boyfriend, Javier Fernandez, who rent at Vantage Pointe apartments. — K.C. Alfred / Union-Tribune staff

San Diego County is now the 13th most expensive rental market in the U.S. out of more than 200 metro areas, says a housing policy group based in Washington D.C.
The local fair-market rent was $1,406 in the first quarter of 2011, up 6.2 percent, or $82, from fiscal 2010. The numbers were recently reported by the National Housing Conference and Center for Housing Policy, who used figures from the U.S. Department of Housing and Urban Development, also known as HUD.
San Diego previously ranked 18th in fair-market rents in fiscal 2010.
The housing group included those numbers as part of a larger report that said that fewer people who were getting hired in some of the "in demand" job markets faced a hard time buying or renting in areas such as San Diego County, the report said.
Those five professions were: accountant, office clerk, security guard, groundskeeper and janitor.

Fair market rents in the U.S.

Rank '11	Metro area	2 BR (2011)	Rank '10	2 BR (2010)
1	San Francisco	$1,833	1	$1,760
2	Santa Cruz, Calif.	$1,730	3	$1,656
3	Honolulu	$1,702	2	$1,704
3	San Jose	$1,702	9	$1,438
5	Suffolk-Nassau	$1,661	5	$1,592
6	Santa Ana, Calif.	$1,584	4	$1,594
7	Oxnard, Calif.	$1,527	8	$1,479
8	Los Angeles	$1,465	10	$1,420
9	Bethesda, Md.	$1,461	6	$1,494
9	Washington, D.C.	$1,461	6	$1,494
11	Edison, N.J.	$1,449	11	$1,409
12	Napa	$1,410	17	$1,350
13	San Diego	$1,406	18	$1,324
14	New York, N.Y.	$1,403	13	$1,359
15	Oakland, Calif.	$1,393	12	$1,377

Source: HUD 

Source: SignOnSanDiego

 

 

New law gives added protection to short sale hopefuls

By Lily Leung

8 a.m., July 18, 2011

A new California law will further protect homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.

Gov. Jerry Brown signed Senate Bill 458, authored by Senate Majority Leader Ellen Corbett (D-San Leandro,) into law on Friday.

A short sale is a transaction in which the homeowner owes more on the loan than the property is worth. To sell the home, the lien holder or lien holders must approve the sale because the amount owed to the lien holder will be "short" of what is currently owed by the borrower.

Real estate tracker DataQuick said short sales made up 17.7 percent of Southern California home resales in June.

The new law builds on the protections offered by a previous law, SB 931, which required the first lien holder in a short sale to accept an agreed-upon payment as the full payment for the outstanding loan balance. The previous law did not address junior lien holders.

The new law, which became effective immediately, now prohibits secondary lien holders from pursuing deficiencies after a short sale closes.

"As the economic recession continues to impact Californians, SB 458 will allow homeowners forced to sell at a loss to have closure at the end of the process," said Corbett, in a statement to the Union-Tribune. "By extending anti-deficiency protection to all loans on a home when a short sale occurs, a homeowner can use a short sale as an alternative to foreclosure or bankruptcy."

The California Association of Realtors call the bill's signing a "victory for California homeowners."

"SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lien holders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property," said Beth L. Peerce, president of the Realtors group, in a statement.

Gov. Jerry Brown — Associated Press file photo

Senate Majority Leader Ellen Corbett

Source: Sign on San Diego

New Luxury Apartment Development in San Marcos Started While San Diego City Redevelopment Projects Take a Hit

By Gabriel Circiog, Associate Editor
RenTV.com reported that Wood Partners has started construction on a new luxury gated apartment community in San Marcos. The four-acre property, located at 815 South Twin Oaks Valley Road, has 12,000 square feet reserved for a future retail development. The residential development is comprised of 42 two-bedroom and 66 one-bedroom units. These will be arranged in four garden style three-story walk-up buildings.
The project will feature granite countertops as well as luxury amenities such as an ultra-modern clubroom with Wifi, electronic gaming systems, a fully-equipped fitness center, a pool and a rooftop terrace. The developer is aiming to offer the highest standard of living in North San Diego County. Construction is scheduled to be completed in October 2012, but the first units will be available in May 2012.
At the same time, 3 Tier Investments LLC will start the construction of its Campus Pointe retail project. The plan comprises two retail building with 12,000 rentable square feet which will include three restaurants and up to seven retail businesses.
In other local news, Signon San Diego informs that the San Diego city redevelopment projects are set to lose $69.8 million in revenues this year and $16.5 million annually henceforth, according to the new state budget plan. Centre City Development Corp. oversees and implements Downtown redevelopment projects and programs.
Frank Alessi, executive vice president of CCDC, told this same source that the organization is facing a $47.6 million payment this year which represents around 38 percent of its tax revenue. The high-profile projects such as the $29.6 million first phase of the North Embarcadero Design and the $8 million expansion of Horton Plaza park will continue as planned if the CCDC board and City Council agree.
Regarding the mega-projects, such as the $550 million expansion of the San Diego Convention center and the $950 million Chargers stadium, Alessi said that the amount of support that the CCDC can offer is problematic.

Source: Multi-Housing New Online

Normal Heights apartment complex sold

By JAMES PALEN, The Daily Transcript

Thursday, July 14, 2011

The lender-owned apartment complex at 4963 35th St. in the Normal Heights neighborhood of San Diego has sold for more than $1 million cash.

Apartment Realty Group represented the seller, 4639 35th Street LLC, which, according to ARG Managing Director James V. Carter, was the San Diego-based private lender that took possession of the property around four years ago. ARG procured more than 10 written offers on the 5,500-square-foot, eight-unit property before closing escrow with the all-cash buyers, Gerald G. Gossman and Rose M. Gossman, for $1,087,500.

Built in 1962, the complex contains six two-bedroom, one-bathroom units and two one-bedroom, one-bathroom units.

Carter spearheaded the sale, while Don Warfield of Donald Warfield & Associates represented the buyer.

Source: San Diego Source The Daily Transcript 

Apartments boost amenities to attract, retain ownership-shy tenants

Sunday, July 3, 2011  03:16 AM 

By Jim Weiker

Fred Squillante | DISPATCH PHOTOS

A lousy housing market has driven hundreds of affluent central Ohioans to apartment complexes.
Now, can community gardens, sports bars, granite countertops and trips to Ikea keep them there?
New high-end complexes from Groveport to Hilliard are offering a bevy of amenities to attract and retain tenants, many of whom are paying more in rent than they might on a mortgage."The same people who rent today might have bought three years ago," said Sam Stark, the sales manager with Lifestyle Communities, whose newest apartment complex - the Paddock at Hayden Run - boasts a 7,000-square-foot sports bar called the Goat.
"There's still fear in the housing market. People want to be mobile, and they're willing to pay a premium for living in an apartment."
Adding to the appeal, the Paddock offers a beach volleyball court, a staffed workout facility, hardwood floors, stainless-steel appliances and 9-foot ceilings.
Down Hayden Run Road, the new Hilliard Grand complex provides a dog park, a community garden, a car wash, 9-foot ceilings, Wi-Fi, a fire-pit terrace and washer-dryer hookups.
Those perks and others are in addition to once-luxurious features now considered a must in high-end rentals: fitness centers, movie rooms, clubhouses, pools, business centers and open floor plans.
To those in the industry, such amenities are more than just brochure fodder: They are tools in what could be a watershed moment in modern housing.
The U.S. homeownership rate has dropped to 66.4 percent of households, its lowest level in 13 years and down from a peak of 69.2 percent in 2004. Although many of America's new renters might be eager to hop back into a home when their finances allow, others are choosing to pay rent instead of a mortgage.
"In the past five or six years, we could have bought a home," said Sri Thokala, 36, who moved into Hilliard Grand in June with his wife, Preeti Kawatra, 30. "But especially looking the last two years at the housing market, and the uncertainty of the job market, I don't want to take that plunge."
The couple was drawn to Hilliard Grand by its proximity to Thokala's software engineering job in Dublin, and by the gym, clubhouse and new appliances. They pay $1,005 a month for a two-bedroom flat.
John Scruggs, a 21-year-old model who recently moved into the Paddock at Hayden Run, doesn't plan to buy a home for "five or six years."
Scruggs' $975-a-month rent could cover a mortgage, but instead of buying, he is considering upgrading to the three-floor town house plan for $1,275 a month.
"It's like living in a condo here. You've got a gym, a bar, a full restaurant and the pool," he said. "It's very classy; there's a lot of young professionals here."
Anthony Verrilli and Noelle Carusillo were drawn to the Paddock by the pool, the workout facilities and their apartment's washer and dryer.
"Not having to have gym or pool memberships, that was huge for us," said Verrilli, whose rent is $800 a month for a one-bedroom unit.
Rent at seven new central Ohio complexes to open in the past 12 months starts in the $700 range and tops out from $1,200 to $1,400 (although some units in Flats on Vine in the Arena District cost more than $1,800) - enough at today's interest rates to buy a $200,000 home.
Stark notes that some Paddock tenants are paying $200 to $300 more to rent a unit than it would cost to buy an almost identical condo in the same complex. Other builders could say the same.
"Tenants now realize they can't sell quickly and move on," said Debbie Rurik-Goodwin, president of the management arm of Edwards Communities, which opened Arlington Park apartments in Hilliard this year. "They're renters by choice, and I think that will continue to be the case for a long time."
Renters also seem to be unpacking their bags for longer stretches.
"I talk to a lot of people in the industry and ask them all this question and, almost uniformly, they tell me retention rates are up 10 to 15percent from the housing collapse," said Greg Willett, vice president of research and analysis at MPF Research, an apartment consulting firm in Texas.
DRK & Co., which has opened three central Ohio complexes in the past year (Prescott Place in Worthington, Albany Landings in New Albany and Winchester Park in Groveport) is finding that tenants stay longer than they did before the housing crash, said company President Tre Geller.
To draw tenants and encourage them to stay, DRK focused on features in its new communities.
"We made a determination a few years ago that the amenities the customers are looking for will be a paramount concern," Geller said. "We upgraded our clubhouse and offer the standard amenities like a pool and exercise facility, but we also have pool tables, 10- to 15-seat movie theaters in the clubhouse, kitchenettes in the clubhouse, and we upgraded the pool and patio areas."
The Edwards Communities, which offered an upscale fitness center in its Quarry community in 1999 and built the Barn restaurant and bar in 2004, pioneered many high-end apartment amenities in central Ohio.
In its new Arlington Park community, the company provides granite countertops, undermount sinks, pendant lighting, side-by-side refrigerators, and, in town house units, screened porches.
The perks seem to have worked: The complex, which opened in January, has rented all but 30 of its 284 units, the fastest lease-up that Rurik-Goodwin has seen in her decade of managing Edwards' apartment communities.
"I think those amenity expectations are only going to grow," she said.
Rurik-Goodwin and others say they are seeing some empty nesters and middle-aged divorced men and women, but renters continue to be dominated by professionals in their 20s and early 30s.
To keep them, complexes are also using tactics beyond physical amenities.
The Paddock and other Lifestyle complexes offer ski clubs and trips to the Cincinnati-area Ikea store.
Hilliard Grand's "purposeful living" is designed to remedy one of renting's main shortcomings: the lack of a sense of community.
"We want to provide opportunities for people ... that will give them more of a purpose than just coming and going, and become attached to others here," said Brett Kaufman, president of the Schottenstein Real Estate Group, which developed the complex.
"Based on what we're seeing in other communities, people who in the past may have seen homeownership as a goal are seeing rental as a long-term option."


Source: The Columbus Dispatch